Exam 4: Supply and Demand: Applications and Extensions

Suppose that the minimum wage was increased to $10 per hour. Which of the following would be most likely to result from the minimum wage increase?

When government gives a subsidy to buyers of good X, the benefits of the subsidy flow to

Suppose the market equilibrium price of corn is $5 per bushel, and the government sets a price ceiling of $4 per bushel. What is the most likely result of this action?

Figure 4-24 -Refer to Figure 4-24. The price that sellers receive after the tax is imposed is

Figure 4-17 -Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good?

Figure 4-15 -In Figure 4-15, suppose a price floor is established at $20.00. What is the result?

Which of the following is a major disadvantage of setting the price of a good below equilibrium and using waiting in line rather than price to ration the good?

If the federal government placed a 50 cent per pack excise tax on cigarette manufacturers, and if as a result, the price to consumers of a pack of cigarettes went up by 40 cents, the

In the supply and demand model, a subsidy granted to buyers is illustrated by

If a $50 subsidy is legally (statutorily) granted to the sellers of weed eaters and as a result the price of weed eaters to consumers falls by $30, the actual benefit of the subsidy

Figure 4-2 -Given the demand and supply conditions shown in Figure 4-2, if the government imposes a price ceiling of a, indicate the quantity consumers would like to buy and the amount producers would be willing to supply.

A tax on the buyers of coffee will

Figure 4-25 -Refer to Figure 4-25. The price that buyers pay after the tax is imposed is

The Laffer curve illustrates the relationship between

Black markets that operate outside the legal system are often characterized by

A law establishing a minimum legal price for a good or service (the minimum wage for example) is known as

If a $2 tax per bottle of wine is imposed on wine producers, which of the following will occur?

According to Friedrich Hayek and his followers, the booms and busts of the business cycle are primarily the result of

Approximately 50,000 luxury boats (priced $100,000 or more) are currently produced each year. Using the economic way of thinking, how much revenue would the government actually generate with a $10,000 excise tax on luxury boats?

A tax for which the average tax rate remains constant at all levels of income is defined as a